Press Release

The following is the text of letter written by Shri Dipankar Mukherjee, Deputy Leader of the CPI(M) in Rajya Sabha, to the Prime Minister, Dr. Manmohan Singh. The letter concerns the nature of the present shareholding pattern in the BHEL in connection with the government’s decision to disinvest 10 per cent of its equity shares.

Since the letter raises important questions about the nature of disinvestment in BHEL shares, it is being released to the media.



4th June 2005

Dear Dr. Manmohan Singhji,


I am constrained to invite your kind attention to the present share holding pattern of BHEL, which shows that 22.74% of the 33% shares, disinvested earlier, are held by Foreign Institutional Investors (FIIs).


As you are kindly aware, during the disinvestment of these shares in the early nineties, it was pronounced that eligible investors would comprise of mutual funds, investment institutions in the public sector and the workers. Inspite of this stated objective it is now clear that during the NDA regime major chunk of the disinvested shares were cornered by FIIs leading to the present situation. Present shareholding of workers is only 0.12% and that of the Indian small investors is 0.89%. Disturbingly, one of the FIIS, UBS Security Asia Ltd., has recently been debarred by SEBI for one year because of its alleged market manipulation in the “market crash of May 2004”, and it is reportedly holding 0.82% share in BHEL. Another FII Merill Lynch Capital Market (0.94% share) is reportedly having links with UBS as well as GE Capital. Our earlier apprehension that the major global competitors of BHEL, viz. GE (USA), Alstom (France), Simens (Germany) etc are eyeing for a foothold in BHEL through FIIs, is therefore quite well founded.


In light of the above I sincerely hope that government would review its decision of disinvesting 10% of its equity shares which may only facilitate entry of one of the major global competitors of BHEL through back door, either through FIIs and through their front companies in India.


With kind regards,

Yours sincerely